minto apartment real estate investment trust

255 Pages·2017·2.12 MB·English

by  Merrill Corporation

No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. This prospectus constitutes a
public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such
securities. These securities have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the ‘‘U.S. Securities
Act’’), or the securities laws of any state of the United States and may not be offered, sold or delivered, directly or indirectly, in the United States, except
pursuant to an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. This prospectus does not
constitute an offer to sell or solicitation of an offer to buy any of these securities in the United States. See ‘‘Plan of Distribution’’.
PROSPECTUS
Initial Public Offering June 22, 2018
16MAY201800493746
MINTO APARTMENT REAL ESTATE INVESTMENT TRUST
$200,013,000
13,794,000 Units
This prospectus qualifies the distribution of 13,794,000 units (each, a ‘‘Unit’’) of Minto Apartment Real Estate Investment Trust (the ‘‘REIT’’), a
newly-created, unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario at an offering price
per Unit (the ‘‘Offering Price’’) of $14.50. See ‘‘Glossary’’ for definitions used in this prospectus.
The REIT has been formed to own and operate, through an Ontario limited partnership (the ‘‘Partnership’’), a portfolio of income-producing
multi-residential rental properties located in urban markets in Canada. The REIT will initially indirectly acquire a portfolio of 22 multi-residential
rental properties, comprising an aggregate of 4,279 suites, located in Toronto, Ottawa, Calgary and Edmonton (collectively, the ‘‘Initial
Properties’’). The Initial Properties are currently owned and operated by Minto Properties Inc. (‘‘MPI’’) which is part of the Minto Group of
companies (collectively, ‘‘Minto’’), a premier Canadian fully integrated real estate company with 63 years of experience in the industry. See ‘‘The
Initial Properties’’ and ‘‘The Acquisition’’.
The objectives of the REIT are to: (a) provide Unitholders an opportunity to invest in high quality income-producing multi-residential rental
properties strategically located across urban centres in Canada; (b) enhance the value of the REIT’s assets and maximize long-term Unitholder
value through value-enhancing capital investment programs and active asset and property management of the REIT’s properties; (c) provide
Unitholders with predictable and sustainable cash distributions; and (d) expand the REIT’s asset base across Canadian urban centres through
intensification programs and acquisitions. See ‘‘The REIT’’. The REIT initially intends to make monthly cash distributions in the estimated annual
amount of $0.41 per Unit, which will provide Unitholders with an approximate annual cash distribution yield of 2.83% and a payout ratio of
approximately 65% of forecast AFFO of the REIT for the Forecasted Period. See ‘‘Distribution Policy’’ and ‘‘Non-IFRS Measures’’.
On Closing, an entity wholly-owned and controlled by MPI (the ‘‘Retained Interest Holder’’) will hold an aggregate of approximately 22.9 million
Class B Units of the Partnership, representing an approximate 62.4% interest in the REIT (approximately 56.8% if the Over-Allotment Option is
exercised in full) on a fully diluted basis assuming all Class B Units are exchanged for Units (the ‘‘Retained Interest’’). The Class B Units will be
economically equivalent to and exchangeable for Units of the REIT (on a one-for-one basis subject to customary anti-dilution adjustments). In
addition, an entity wholly-owned and controlled by MPI will hold all of the outstanding Class C Units of the Partnership in respect of the Retained
Debt (as defined below). Minto intends to maintain a significant ownership position in the REIT over the long-term. See ‘‘Retained Interest’’ and
‘‘Plan of Distribution’’.
The REIT will, through the Partnership, directly employ an experienced executive and operational team of real estate professionals, comprised of
former Minto employees and employees who will be dually employed by the REIT and Minto. Management’s industry experience, its long track-
record with the Initial Properties, its established institutional relationships to facilitate future growth and its proven governance and reporting
capabilities are expected to provide significant benefit to the REIT enabling the REIT to maximize asset performance and deliver predictable,
attractive returns to Unitholders. The REIT will also benefit from cost-efficient access to Minto’s best-in-class real estate platform. The REIT
intends to leverage Minto’s fully integrated real estate operating platform with a strong investment track record and extensive relationships in the
Canadian multi-residential rental real estate sector. Minto is one of the premier real estate companies in Canada with a fully integrated real estate
investment, development and management platform. Since its inception in 1955, Minto has built more than 85,000 new homes, and currently
manages over 13,000 residential suites and a commercial portfolio of more than 2.5 million square feet of office and retail space. Minto’s expertise
spans the full spectrum of real estate investment disciplines. Minto’s operational excellence has been well recognized by the Canadian real estate
industry. See ‘‘The REIT—About Minto’’ and ‘‘Arrangements with Minto’’.
Price $14.50 per Unit
Price to Underwriters’ Net Proceeds to the
the Public(1)(2) Fee REIT(3)
Per Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $14.50 $0.83 $13.67
Total(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $200,013,000 $11,500,748 $188,512,252
Notes:
(1) All dollar amounts in this prospectus are stated in Canadian dollars unless otherwise specifically noted.
(continued on next page)
High quality portfolio
of 22 multi-residential
rental properties
comprising 4,279 suites
MintOo_PUrosTpeSctuIsDArtEwo rFk-ERNGO_vN20.iTnd dF 2LAP 2018-06-07 10:01 AM
REIT Overview
22
~98%(1) $1,358(1)
properties comprising
4,279
Occupancy Average
monthly rent
suites
EDMONTON
Number of Properties: 3
Number of Suites: 251
CALGARY
Number of Properties: 1
Number of Suites: 144 OTTAWA
Number of Properties: 14
Number of Suites: 3,060
TORONTO
Number of Properties: 4
1. As at March 31, 2018; excludes furnished suites
Number of Suites: 824
Initial Properties strategically located across
four attractive urban centres in Canada
Highest in-place rent among public peers
REIT will be sponsored by Minto, a premium Canadian
real estate company with 60+ years of history
Management has long operating track record
with REIT portfolio
$55 million of capital investment into the portfolio
over the past 3 years, ~$29 million in 2017
Minto_IPNroSspeIcDtusEAr twGorkA-ETNGE_Fv20O.inLdd D 3 2018-06-07 10:01 AM
REIT Overview Multiple Avenues of Growth
Organic:
• Gain-to-lease on existing rents
• D rive revenue, and create value through in-suite and
common area improvements
• Intensification
External:
• Strategic Alliance Agreement with Minto
• Right of First Opportunity (ROFO)
OTTAWA
Number of Properties: 14
• Potential access to Minto Interests
Number of Suites: 3,060
> Minto holds a $510 million proportionate interest in $1.7 billion
of high quality multi-residential assets, for which it acts as the
managing investor
> Development pipeline of ~$800 million / ~1,500 suites
• Target high quality multi-residential properties in urban
centres across Canada
• H ighly fragmented Canadian multi-residential sector
provides consolidation opportunity
• M into has a demonstrated ability to source and execute
transactions, with ~$1.9 billion of transactions completed
since 2010
Minto_ProspectusArtwork-ENG_v20.indd 4 2018-06-07 10:01 AM
(continued from cover)
(2) The Offering Price was established by negotiation between the REIT, MPI and the Underwriters.
(3) Before deducting expenses of the Offering estimated at $4,700,000 which, together with the Underwriters’ fee, will be paid from the
proceeds of the Offering.
(4) The REIT has granted to the Underwriters an option, exercisable in whole or in part and at any time up to 30 days after Closing, to
purchase up to an additional 2,069,100Units on the same terms as set forth above solely to cover the Underwriters’ over-allocation
position, if any, and for consequent market stabilization purposes. If the Over-Allotment Option is exercised in full, the total price to
the public, Underwriters’ fee and net proceeds to the REIT will be $230,014,950, $13,225,860 and $216,789,090, respectively. See ‘‘Plan
of Distribution’’. This prospectus qualifies the distribution of the Over-Allotment Option and the Units issuable on the exercise
thereof. A purchaser who acquires Units forming part of the Underwriters’ over-allocation position acquires those Units under this
prospectus, regardless of whether the position is ultimately filled through the exercise of the Over-Allotment Option or secondary
market purchases.
Maximum Size or Number of
Underwriters’ Position Securities Available Exercise Period Exercise Price
Over-Allotment Option. . . . . . . . . . . . . Option to acquire up to 2,069,100 Units 30 days from Closing $14.50 per Unit
Toronto Stock Exchange has conditionally approved the listing of the Units under the symbol ‘‘MI.UN’’. Listing is subject to the REIT
fulfilling all of the requirements of the Exchange on or before September6, 2018. There is currently no market through which the Units may be
sold and, if a market for the Units does not develop or is not sustained, purchasers may not be able to resell Units purchased under this
prospectus. This may affect the pricing of the Units in the secondary market, the transparency and availability of trading prices, the liquidity
of the Units and the extent of issuer regulation. See ‘‘Risk Factors’’. Closing of the Offering is expected to occur on July3, 2018 or such other
date as the REIT and the Underwriters may agree, but in any event not later than July17, 2018. See ‘‘Plan of Distribution’’.
A return on a purchaser’s investment in Units is not comparable to the return on an investment in a fixed income security. The recovery of a
purchaser’s initial investment is at risk and the anticipated return on a purchaser’s investment is based on many performance assumptions.
Although the REIT intends to make distributions from AFFO to Unitholders, these distributions may be reduced or suspended. The actual
amount distributed will depend on numerous factors including the financial performance of the REIT’s properties, debt covenants and other
contractual obligations, working capital requirements and future capital requirements, all of which are subject to a number of risks. The
market value of the Units may decline if the REIT is unable to meet its AFFO targets in the future, and that decline may be material. See
‘‘Non-IFRS Measures’’. An investment in the Units involves a number of risks and it is important for a purchaser of Units to consider the
particular risk factors described in the ‘‘Risk Factors’’ section of this prospectus, which may affect the REIT and its business, the multi-
residential rental sector and the Offering, and therefore the stability of distributions that a purchaser of Units receives.
The after-tax return from an investment in Units to Unitholders subject to Canadian federal income tax will depend, in part, on the
composition for Canadian federal income tax purposes of distributions paid by the REIT, portions of which may be fully or partially taxable
or may constitute tax deferred returns of capital (i.e., returns that initially are non-taxable but which reduce the adjusted cost base of the
Unitholders’ Units). The REIT estimates that approximately 56% of the monthly cash distributions to be made by the REIT to Unitholders
will be tax deferred for Canadian federal income tax purposes in 2018. The composition of distributions for Canadian federal income tax
purposes may change over time, thus affecting the after-tax return to Unitholders. Prospective purchasers of Units should consult their own
tax advisors with respect to the Canadian income tax considerations applicable in their circumstances. See ‘‘Certain Canadian Federal
Income Tax Considerations’’ below.
TD Securities Inc. (‘‘TD’’), BMO Nesbitt Burns Inc. (‘‘BMO’’), CIBC World Markets Inc., RBC Dominion Securities Inc., Scotia
Capital Inc., National Bank Financial Inc., Canaccord Genuity Corp., Desjardins Securities Inc., Raymond James Ltd. and
Industrial Alliance Securities Inc. (collectively, the ‘‘Underwriters’’), as principals, conditionally offer the Units, subject to prior sale, if, as
and when issued by the REIT and accepted by the Underwriters in accordance with the conditions contained in the Underwriting Agreement
referred to under ‘‘Plan of Distribution’’ and subject to the approval of certain legal matters on behalf of the REIT by Goodmans LLP, and
on behalf of the Underwriters by Blake, Cassels & Graydon LLP. The Underwriters may engage in market stabilization activities as described
under ‘‘Plan of Distribution’’. Subscriptions will be received subject to rejection or allotment in whole or in part and the right is reserved to
close the subscription books at any time without notice. Registrations and transfers of Units will be effected electronically through the
non-certificated inventory (‘‘NCI’’) system administered by CDS Clearing and Depository Services Inc. (‘‘CDS’’). Beneficial owners of Units
will not, except in certain limited circumstances, be entitled to receive physical certificates evidencing their ownership of Units. See ‘‘Plan of
Distribution’’ and ‘‘Declaration of Trust—Non-Certificated Inventory System’’.
In connection with the Offering, the Underwriters may, subject to applicable law, over-allocate or effect transactions which stabilize or
maintain the market price of the Units at levels other than those which otherwise might prevail on the open market. Such transactions, if
commenced, may be discontinued at any time. The Underwriters may offer the Units at lower prices than stated above. See ‘‘Plan of
Distribution’’.
The REIT is not a trust company and is not registered under applicable legislation governing trust companies as it does not carry on or
intend to carry on the business of a trust company. The Units are not ‘‘deposits’’ within the meaning of the Canada Deposit Insurance
Corporation Act (Canada) and are not insured under the provisions of that statute or any other legislation.
All of the Underwriters, other than Canaccord Genuity Corp. and National Bank Financial Inc., are affiliates of Canadian chartered banks or
financial institutions that have provided mortgage financing and credit lines to MPI or its affiliates in the aggregate principal amount of
approximately $873.1 million as at March 31, 2018, of which mortgages in the amount of approximately $137.3 million as at March 31, 2018
are expected to be assumed by the REIT or the Partnership, approximately $115.2 million as at March 31, 2018 are expected to comprise the
Retained Debt, and approximately $38.7 million will be repaid pursuant to the Assumed Debt and Retained Debt refinancings. An additional
approximately $12.9 million will be incremental financing which will form part of the Assumed Debt. Further, affiliates of TD and BMO have
committed to provide the REIT with the Credit Facility at Closing. A Trustee of the REIT is a director of a Canadian chartered bank of which
an Underwriter is a subsidiary. Consequently, the REIT may be considered a ‘‘connected issuer’’ of each of such Underwriters under
applicable Canadian securities laws. See ‘‘Debt Strategy and Indebtedness’’ and ‘‘Plan of Distribution’’.
TABLE OF CONTENTS
Page Page
MEANING OF CERTAIN REFERENCES . 1 FORECAST NON-IFRS
RECONCILIATION . . . . . . . . . . . . . . . . 112
ELIGIBILITY FOR INVESTMENT . . . . . . 1
MANAGEMENT’S DISCUSSION AND
MARKET AND INDUSTRY DATA . . . . . . 1
ANALYSIS OF RESULTS OF
CERTAIN OTHER INFORMATION . . . . . 2
OPERATIONS . . . . . . . . . . . . . . . . . . . . 114
RELIANCE . . . . . . . . . . . . . . . . . . . . . . . . 2
INVESTMENT GUIDELINES AND
NON-IFRS MEASURES. . . . . . . . . . . . . . . 2 OPERATING POLICIES. . . . . . . . . . . . . 132
FORWARD-LOOKING STATEMENTS . . . 3 DECLARATION OF TRUST . . . . . . . . . . . 135
MARKETING MATERIALS . . . . . . . . . . . 5 THE PARTNERSHIP . . . . . . . . . . . . . . . . . 143
PROSPECTUS SUMMARY . . . . . . . . . . . . 6 DISTRIBUTION POLICY . . . . . . . . . . . . . 147
THE OFFERING . . . . . . . . . . . . . . . . . . . . 24 CERTAIN CANADIAN FEDERAL
INCOME TAX CONSIDERATIONS . . . . 148
THE REIT. . . . . . . . . . . . . . . . . . . . . . . . . 26
PLAN OF DISTRIBUTION . . . . . . . . . . . . 152
INVESTMENT OPPORTUNITY . . . . . . . . 27
USE OF PROCEEDS. . . . . . . . . . . . . . . . . 155
INVESTMENT HIGHLIGHTS . . . . . . . . . . 27
RISK FACTORS. . . . . . . . . . . . . . . . . . . . . 155
GROWTH STRATEGIES OF THE REIT . . 31
MATERIAL CONTRACTS . . . . . . . . . . . . . 175
MULTI-RESIDENTIAL RENTAL REAL
ESTATE CHARACTERISTICS . . . . . . . . 33 INTERESTS OF MANAGEMENT AND
OTHERS IN MATERIAL
MULTI-RESIDENTIAL RENTAL SECTOR
TRANSACTIONS . . . . . . . . . . . . . . . . . . 176
DYNAMICS . . . . . . . . . . . . . . . . . . . . . . 35
PROMOTER . . . . . . . . . . . . . . . . . . . . . . . 176
KEY RESIDENTIAL TENANCY
LEGISLATION . . . . . . . . . . . . . . . . . . . . 44 PRINCIPAL UNITHOLDERS . . . . . . . . . . 176
THE INITIAL PROPERTIES . . . . . . . . . . . 45 PRIOR SALES. . . . . . . . . . . . . . . . . . . . . . 177
DESCRIPTION OF THE INITIAL LEGAL PROCEEDINGS . . . . . . . . . . . . . . 177
PROPERTIES. . . . . . . . . . . . . . . . . . . . . 49
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . 177
ASSESSMENT AND VALUATION OF
AUDITORS, TRANSFER AGENT AND
THE INITIAL PROPERTIES . . . . . . . . . 56
REGISTRAR . . . . . . . . . . . . . . . . . . . . . 177
DEBT STRATEGY AND INDEBTEDNESS 58
EXEMPTIONS FROM CERTAIN
THE ACQUISITION . . . . . . . . . . . . . . . . . 62 PROVISIONS OF NATIONAL
INSTRUMENT 41-101 . . . . . . . . . . . . . . 177
RETAINED INTEREST . . . . . . . . . . . . . . . 64
PURCHASERS’ STATUTORY RIGHTS . . . 178
POST-CLOSING STRUCTURE . . . . . . . . . 69
GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . 179
TRUSTEES AND EXECUTIVE
OFFICERS OF THE REIT . . . . . . . . . . . 70 INDEX TO FINANCIAL STATEMENTS . . F-1
ARRANGEMENTS WITH MINTO . . . . . . 83 CHARTER OF THE AUDIT
COMMITTEE. . . . . . . . . . . . . . . . . . . . . A-1
EXECUTIVE COMPENSATION . . . . . . . . 88
CERTIFICATE OF THE REIT AND THE
INDEBTEDNESS OF TRUSTEES AND
PROMOTER . . . . . . . . . . . . . . . . . . . . . C-1
EXECUTIVE OFFICERS . . . . . . . . . . . . 96
CERTIFICATE OF THE
CAPITALIZATION OF THE REIT . . . . . . 96
UNDERWRITERS . . . . . . . . . . . . . . . . . C-2
FINANCIAL FORECAST. . . . . . . . . . . . . . 96
MEANING OF CERTAIN REFERENCES
In this prospectus, except where otherwise indicated or the context otherwise requires, it is assumed that the
Offering has been completed and the transactions described under ‘‘The Acquisition’’ have been completed.
References to the ‘‘REIT’’ in this prospectus include its subsidiaries, unless the context otherwise requires.
Unless otherwise indicated, all dollar amounts in this prospectus are stated in Canadian dollars and references
to dollars or ‘‘$’’ are to Canadian currency.
Certain terms used in this prospectus are defined under ‘‘Glossary’’.
Unless otherwise indicated, the disclosure in this prospectus assumes that the Over-Allotment Option is
not exercised.
References to ‘‘management’’ in this prospectus means the persons acting in the capacities of the REIT’s
Chief Executive Officer, President and Chief Operating Officer, Chief Financial Officer, Chief Investment
Officer and Senior Vice President, Operations. Any statements in this prospectus made by or on behalf of
management are made in such persons’ capacities as officers of the REIT and not in their personal capacities.
ELIGIBILITY FOR INVESTMENT
In the opinion of Goodmans LLP, counsel to the REIT, and Blake, Cassels & Graydon LLP, counsel to the
Underwriters, based on the current provisions of the Tax Act, and subject to the provisions of any particular
plan, provided that the REIT qualifies at all times as a ‘‘mutual fund trust’’ (as defined in the Tax Act) or the
Units are listed on a ‘‘designated stock exchange’’ (as defined in the Tax Act, which includes the TSX), the Units
will be a qualified investment for trusts governed by a registered retirement savings plan (‘‘RRSP’’), registered
education savings plan (‘‘RESP’’), registered retirement income fund (‘‘RRIF’’), deferred profit sharing plan,
registered disability savings plan (‘‘RDSP’’) or a tax-free savings account (‘‘TFSA’’) (collectively, ‘‘Exempt
Plans’’).
Notwithstanding the foregoing, if the Units are a ‘‘prohibited investment’’ (as defined in the Tax Act) for a
trust governed by a TFSA, RRSP, RRIF, RESP or RDSP, the holder, annuitant or subscriber thereof will be
subject to a penalty tax as set out in the Tax Act. The Units will not be a prohibited investment for a TFSA,
RRSP, RRIF, RESP or RDSP provided the holder, annuitant or subscriber of such registered plan deals at arm’s
length with the REIT, for purposes of the Tax Act, and does not have a ‘‘significant interest’’ (as defined in the
Tax Act) in the REIT. Generally, a holder, annuitant or subscriber will have a significant interest in the REIT if
the holder, annuitant or subscriber, either alone or together with persons or partnerships not dealing at arm’s
length with the holder, annuitant or subscriber, for the purposes of the Tax Act, holds interests as a beneficiary
under the REIT that have a fair market value of 10% or more of the fair market value of the interests of all
beneficiaries under the REIT. In addition, the Units will not be a ‘‘prohibited investment’’ if the Units are
‘‘excluded property’’ as defined in the Tax Act for trusts governed by a TFSA, RRSP, RRIF, RESP or RDSP.
Prospective purchasers who intend to hold their Units in their TFSAs, RRSPs, RRIFs, RESPs or RDSPs should
consult their own tax advisors regarding their particular circumstances.
MARKET AND INDUSTRY DATA
This prospectus includes market and industry data and forecasts that were obtained from third-party
sources, industry publications and publicly available information as well as industry data prepared by
management on the basis of its knowledge of the multi-residential rental sector in which the REIT will operate
(including management’s estimates and assumptions relating to the sector based on that knowledge).
Management’s knowledge of the Canadian multi-residential rental sector has been developed through its
experience and participation in the sector. Management believes that its industry data is accurate and that its
estimates and assumptions are reasonable, but there can be no assurance as to the accuracy or completeness of
this data. Third-party sources generally state that the information contained therein has been obtained from
sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of included
information. Although management believes it to be reliable, neither the REIT nor the Underwriters have
independently verified any of the data from management or third-party sources referred to in this prospectus, or
analyzed or verified the underlying studies or surveys relied upon or referred to by such sources, or ascertained
1
the underlying economic assumptions relied upon by such sources. For the avoidance of doubt, nothing stated in
this paragraph operates to relieve the REIT or the Underwriters from liability for any misrepresentation
contained in this prospectus under applicable Canadian securities laws.
CERTAIN OTHER INFORMATION
Graphs and tables demonstrating the historical performance of the Initial Properties contained in this
prospectus are intended only to illustrate past performance and are not necessarily indicative of future
performance. Numbers contained in graphs and tables in this prospectus are subject to rounding.
RELIANCE
Prospective investors should rely only on information contained in this prospectus and should not rely on
parts of the information contained in this prospectus to the exclusion of others. None of the REIT, MPI, as
promoter (the ‘‘Promoter’’), nor the Underwriters has authorized any other person to provide prospective
investors with different information. If a prospective investor is provided with different or inconsistent
information, the prospective investor should not rely on such information. Neither the REIT nor the
Underwriters is making an offer to sell Units in any jurisdiction where such an offer or sale is prohibited. Unless
otherwise stated, the information contained in this prospectus is accurate only as of the date of this prospectus,
regardless of the time of delivery of this prospectus or any sale of Units. The REIT’s business, financial
condition, results of operations and prospects may have changed since the date of this prospectus.
This prospectus contains summary descriptions of certain material agreements of the REIT. See ‘‘Material
Contracts’’. The summary descriptions disclose attributes of such agreements material to an investor in the Units
but are not complete and are qualified in their entirety by reference to the terms of the material agreements,
which will be filed with the Canadian securities regulatory authorities and made available electronically on
SEDAR at www.sedar.com. Investors should read the full text of such material agreements.
NON-IFRS MEASURES
In this prospectus, the REIT uses certain non-IFRS financial measures, which include funds from
operations (‘‘FFO’’), adjusted funds from operations (‘‘AFFO’’), net operating income (‘‘NOI’’) and Same
Property NOI to measure, compare and explain the operating results and financial performance of the REIT.
These terms are commonly used by entities in the real estate industry as useful metrics for measuring
performance. However, they do not have any standardized meaning prescribed by IFRS and are not necessarily
comparable to similar measures presented by other publicly traded entities. These measures should be
considered as supplemental in nature and not as a substitute for related financial information prepared in
accordance with IFRS. See ‘‘Forecast Non-IFRS Reconciliation’’ and ‘‘Management’s Discussion and Analysis
of Results of Operations’’ for a reconciliation of FFO, AFFO and NOI to the most directly comparable
IFRS measure.
In February 2018, the Real Property Association of Canada (‘‘REALpac’’), published a white paper titled
‘‘White Paper on Funds From Operations & Adjusted Funds From Operations for IFRS’’. The purpose of the
white paper is to provide reporting issuers and investors with greater guidance on the definition of FFO and
AFFO and to help promote more consistent disclosure from reporting issuers. The REIT has reviewed the white
paper and has implemented the recommended disclosures in this prospectus, except as noted below.
FFO is defined as IFRS consolidated net income adjusted for items such as unrealized changes in the fair
value of investment properties, effects of puttable instruments classified as financial liabilities, net changes in
fair value of financial instruments and depreciation and amortization. FFO should not be construed as an
alternative to net income or cash flows provided by or used in operating activities determined in accordance with
IFRS. The REIT’s method of calculating FFO is in accordance with REALpac’s recommendations, but may
differ from other issuers’ methods and, accordingly, may not be comparable to FFO reported by other issuers.
The REIT regards FFO as a key measure of operating performance.
AFFO is defined as FFO adjusted for items such as maintenance capital expenditures and straight-line
rental revenue differences. AFFO should not be construed as an alternative to net income or cash flows
2
provided by or used in operating activities determined in accordance with IFRS. The REIT’s method of
calculating AFFO is in accordance with REALpac’s recommendations, except that it also adjusts for the
amortization of the mark-to-market related to debt, but may differ from other issuers’ methods and, accordingly,
may not be comparable to AFFO reported by other issuers. The REIT regards AFFO as a key measure of
operating performance. The REIT also uses AFFO in assessing its distribution paying capacity.
NOI is defined as revenue from properties less property operating expenses, property taxes and utilities
prepared in accordance with IFRS. NOI should not be construed as an alternative to net income determined in
accordance with IFRS. The REIT’s method of calculating NOI may differ from other issuers’ methods and,
accordingly, may not be comparable to NOI reported by other issuers. The REIT regards NOI as an important
measure of the income generated from income-producing properties and is used by the REIT in evaluating the
performance of the REIT’s properties. It is also a key input in determining the value of the REIT’s properties.
Same Property NOI represents total revenues less property operating expenses, property taxes and utilities
after the removal of the impact of acquisitions. Management uses Same Property NOI to evaluate the
performance of the portfolio on a comparable basis period over period.
See ‘‘Forecast Non-IFRS Reconciliation’’ and ‘‘Management’s Discussion and Analysis of Results of
Operations’’ for a reconciliation of FFO, AFFO and NOI to the most directly comparable IFRS measure.
FORWARD-LOOKING STATEMENTS
This prospectus contains ‘‘forward-looking information’’ as defined under Canadian securities laws
(collectively, ‘‘forward-looking statements’’) which reflect management’s expectations regarding objectives,
plans, goals, strategies, future growth, results of operations, performance and business prospects and
opportunities of the REIT. The words ‘‘plans’’, ‘‘expects’’, ‘‘does not expect’’, ‘‘goals’’, ‘‘seek’’, ‘‘strategy’’,
‘‘future’’, ‘‘estimates’’, ‘‘intends’’, ‘‘anticipates’’, ‘‘does not anticipate’’, ‘‘projected’’, ‘‘believes’’ or variations of
such words and phrases or statements to the effect that certain actions, events or results ‘‘may’’, ‘‘will’’, ‘‘could’’,
‘‘would’’, ‘‘should’’, ‘‘might’’, ‘‘likely’’, ‘‘occur’’, ‘‘be achieved’’ or ‘‘continue’’ and similar expressions identify
forward-looking statements. In addition, any statements that refer to expectations, intentions, projections or
other characterizations of future events or circumstances contain forward-looking statements. Forward-looking
statements are not historical facts but instead represent management’s expectations, estimates and projections
regarding future events or circumstances.
Discussions containing forward-looking statements may be found, among other places, under ‘‘Prospectus
Summary’’, ‘‘The REIT’’, ‘‘Investment Opportunity’’, ‘‘Growth Strategies of the REIT’’, ‘‘Multi-Residential
Rental Real Estate Characteristics’’, ‘‘The Initial Properties’’, ‘‘Debt Strategy and Indebtedness’’, ‘‘The
Acquisition’’, ‘‘Trustees and Executive Officers of the REIT’’, ‘‘Executive Compensation’’, ‘‘Financial Forecast’’,
‘‘Management’s Discussion and Analysis of Results of Operations’’, ‘‘Distribution Policy’’, ‘‘Certain Canadian
Federal Income Tax Considerations’’, ‘‘Plan of Distribution’’, ‘‘Use of Proceeds’’ and ‘‘Risk Factors’’.
Some of the specific forward-looking statements in this prospectus include, but are not limited to,
statements with respect to the following:
(cid:127) the Offering Price, completion, size, expenses and intended use of net proceeds of the Offering and the
timing of Closing;
(cid:127) the completion of the transactions as contemplated under ‘‘The Acquisition’’;
(cid:127) the closing of the other transactions expected to occur on or following Closing, which are described in this
prospectus;
(cid:127) the listing of the Units on the TSX;
(cid:127) the intention of the REIT to pay and preserve Unitholders’ distributions;
(cid:127) the ability of the REIT to execute its growth strategies;
(cid:127) the REIT’s competitive position within its industry;
(cid:127) the ability of the REIT to execute its debt strategy;
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(cid:127) expectations regarding laws, rules and regulations applicable to the REIT;
(cid:127) expectations regarding future Trustee and executive compensation levels and plans;
(cid:127) the forecasted financial results of the REIT for the periods set out in the ‘‘Financial Forecast’’ section of
this prospectus;
(cid:127) the expected tax treatment of the REIT and of the REIT’s distributions to Unitholders;
(cid:127) the REIT’s relationship with Minto; and
(cid:127) the expected industry and demographic trends.
Such forward-looking statements are qualified in their entirety by the inherent risks, uncertainties and
changes in circumstances surrounding future expectations which are difficult to predict and many of which are
beyond the control of the REIT, including that the transactions contemplated herein are completed.
Forward-looking statements are necessarily based on a number of estimates and assumptions that, while
considered reasonable by management of the REIT as of the date of this prospectus, are inherently subject to
significant business, economic and competitive uncertainties and contingencies. The REIT’s estimates, beliefs
and assumptions, which may prove to be incorrect, include the various assumptions set forth herein, including,
but not limited to, the REIT’s future growth potential, results of operations, future prospects and opportunities,
demographic and industry trends, no change in legislative or regulatory matters, future levels of Indebtedness,
the tax laws as currently in effect, the continuing availability of capital and current economic conditions.
When relying on forward-looking statements to make decisions, the REIT cautions readers not to place
undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties.
Forward-looking statements should not be read as guarantees of future performance or results and will not
necessarily be accurate indications of whether or not the times at or by which such performance or results will be
achieved. A number of factors could cause actual results to differ, possibly materially, from the results discussed
in the forward-looking statements, including, but not limited to:
(cid:127) the REIT’s ability to execute its growth strategies;
(cid:127) the impact of changing conditions in the Canadian multi-residential rental sector;
(cid:127) the marketability and value of the REIT’s portfolio;
(cid:127) changes in the attitudes, financial condition and demand of the REIT’s demographic market;
(cid:127) fluctuation in interest rates and volatility in financial markets;
(cid:127) general economic conditions;
(cid:127) developments and changes in applicable laws and regulations; and
(cid:127) such other factors discussed under ‘‘Risk Factors’’ and ‘‘Management’s Discussion and Analysis of
Results of Operations’’ in this prospectus.
If any risks or uncertainties with respect to the above materialize, or if the opinions, estimates or
assumptions underlying the forward-looking statements prove incorrect, actual results or future events might
vary materially from those anticipated in the forward-looking statements. The opinions, estimates or
assumptions referred to above and described in greater detail under ‘‘Risk Factors’’ should be considered
carefully by readers. Although management has attempted to identify important risk factors that could cause
actual results to differ materially from those contained in forward-looking statements, there may be other risk
factors not presently known or that management believes are not material that could also cause actual results or
future events to differ materially from those expressed in such forward-looking statements.
Certain statements included in this prospectus may be considered a ‘‘financial outlook’’ for purposes of
applicable Canadian securities laws, and as such, the financial outlook may not be appropriate for purposes
other than this prospectus. All forward-looking statements are based only on information currently available to
the REIT and are made as of the date of this prospectus. Except as expressly required by applicable Canadian
securities law, the REIT assumes no obligation to publicly update or revise any forward-looking statement,
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